110 P. 356 | Utah | 1910
This is the third time this case comes before this court in some form. The first time it was on the garnishee’s motion to dismiss the appeal on the ground that the judgment discharging it was not a final udgment, and therefore not ap-pealable. (Bristol v. Brent, 35 Utah, 213, 99 Pac. 100.) On the second appeal the garnishee contended that the court had not acquired jurisdiction of it nor of the res — the debt. We held that, while the court had obtained jurisdiction of
It is no longer an open question that the exemption laws of a state have no extraterritorial effect, and, in the absence of local statutes, will not ordinarily be given effect in another state. There is nothing made to appear
Counsel for appellant most earnestly contend that the trial court erred in its conclusions of law and in entering judgment, while counsel for the garnishee, with equal earnestness, insist that the court’s ruling is sound, and that the judgment conforms to the law applicable to the undisputed facts. In view that it becomes important to determine whether, under our statute, the garnishee was legally suable in this state for the amount conceded to be owing by it to the defendant, we shall first consider that question. In passing
“The summons must he served hy delivering a copy thereof as follows: ... If the defendant is a foreign corporation, or nonresident joint-stock company or association, to the president, secretary, treasurer, or other officer thereof, or to the person designated hy such corporation, company, or association, as one upon whom process may he served. If no such person can he found, then upon any clerk, superintendent, general agent, cashier, principal director, ticket agent, station keeper, managing agent, or other agent having the management, direction, or control of any property, of such corporation, company, or association. If none of the persons named in this subdivision can he found in the county in which such action is commenced then service may be made as provided herein upon any such persons in any county of this state. If there he none of such persons in the state of Utah, and the defendant has, or advertises, or holds itself out as having an office or place of business in this state, or does business in the state, then upon the person doing such business or in charge of such office or place of business.”
In view of the foregoing provisions, and of the facts as found in finding No. 5, supra, and the other facts before stated, was the garnishee a foreign corporation suable in the courts of this state, and could jurisdiction be acquired over it without its consent so as to reach and condemn the debt owing by it to the defendant ? The district court held that the garnishee was not doing business in this state, that it was not represented in its corporate capacity by the so-called
In none of the foregoing cases, or in any other that we have seen, is the extent of the business that must be done by the foreign corporation in the foreign state to make it suable there under a statute like ours defined. Indeed, in the latest case where this question is considered by the Supreme Court of the United States, namely, Coml. Mut. Accident Co. v. Davis, 213 U. S., at page 256, 29 Sup. Ct., at page 448 (53 L. Ed. 782), decided in 1909, that court, in speaking through Mr. Justice Day, in referring to the extent of business required to be done, says: “Previous cases in this court have not defined the extent of the business necessary to the presence of a foreign corporation in a state for the purpose of a valid service; it is sufficient if it is doing business there.” The question touching the extent of the business that is necessary to bring the corporation within the foreign state so as to be amenable to service of legal process there is again left open in the case, as it was in the others. All that the Supreme Court of the United States, which is the court of last resort upon this question, has done, so far, is to say that under pertain facts when applied to particular state or federal statutes the courts did or did not acquire jurisdiction over a foreign corporation.
In our judgment the case to which we have been referred by counsel, and to. which we have herein referred, are not
We therefore are not only justified in assuming, but are in a measure forced to the conclusion, that the rule as promulgated in the Boiler Case is the »one that prevails in the Supreme Court of the United States, where the question arose in a state court upon a statute similar in terms to our own. Under our statute a foreign corporation may likewise be served with legal process within this state if it “has or advertises, or holds itself out as having an office or place of business in this state.” In such case service may be made upon the person who is “in charge of said office or place of business.” If the corporation, therefore, maintains an office in this state and places it in charge of a person whom it publicly announces to be its agent, or general agent, and if through him it solicits freight and passenger business, why is the corporation not represented by such an agent? True, such an agent may not have the power to bind the corporation in all of its business affairs, but is it necessary that an agent, in order to make a valid service of legal process upon him under a particular statute, be such as represents the corporation in all of its. business affairs, or one who has power to bind it with respect to any and every matter that comes within the object for which the corporation was created ? Under modern methods of carrying on corporation business, such an agent would -be hard to find indeed. If the person who is designated as agent is in fact the representative of the corporation, we cannot see how it is of controlling importance to what extent or in what particular manner the agent represents the company, provided the statute authorizes service upon such a person or agent. In this case the garnishee, with full knowledge of the terms of our statute, procured, and has for sixteen years maintained, an office in this state and has placed Mr. Warren in charge thereof as its “general agent.” The evidence shows that the business conducted by Mr. Warren in Utah required an assistant, and
It goes without saying that to transport freight and passengers is the very purpose for which a railroad company is created and conducted. If there be sharp competition in the business, as there usually is at what are termed railroad centers, the railroad companies, in order to obtain their proportionate share of the business, must place solicitors in the field. Why is such a solicitor not directly connected with the business of the company just as much as the agent of the company who receives the freight from the person who, pursuant to the request of the solicitor, delivers it to the agent for shipment or transportation ? The difference, if any, is one of degree rather than of kind. No one can read our statute and not be forced to the conclusion that it was ifche intention of the legislature to reach with legal process .•all corporations who are conducting business in this state through agents as the garnishee was doing when its agent was ¡served with process in this case. As suggested, we think •that, within the limits referred to in this opinion, it is within -the province of the legislature to designate the person or -persons who represent the corporation upon whom legal process may be served. The doctrine is well stated by Mr. Chief •’Justice Sherwood in the case of McNichol v. U. S., etc., Agency, 74 Mo., at page 475, in the following words: “Nor is it any inherent, fundamental quality in the corporation that process against it should be served upon its principal
In concluding this branch of the case, we remark that the legislative policy of permitting all without restriction, to make the courts of this state the medium through which to settle their legal controversies, may perhaps not be the wisest that could be adopted. We are, how-
Notwithstanding the fact, however, that the garnishee may have been suable in this state, counsel nevertheless insist that in view that all the parties, including the garnishee, are nonresidents of the state; that the jurisdiction of the court depends upon the attachment of a debt owing by the garnishee to the defendant in the action; that the debt was neither incurred nor payable in this state — therefore the-court acquired no jurisdiction over the debt or money owing by the garnishee to the defendant. The question with regard to when, how, and under what circumstances, money owing by one person to another may be attached by process of garnishment either with or without personal service upon the creditor, or whether before or after judgment, in jurisdictions other than that of debtor and creditor, or of either of them, the authorities are in hopeless conflict. There has been a vast amount of learned discussion upon the subject by the different courts, both state and federal. We shall
Upon the other hand, among the cases which hold that for the purposes of attachment by process of garnishment a debt has no situs, and that it may be attached wherever the debtor may be found and where the creditor could sue and enforce his claim, are the following: Chicago, R. I. & P. Ry. v. Sturm, 174 U. S. 710, 17 Sup. Ct. 797, 43 L. Ed. 1144; Baltimore & O. R. v. Allen, 58 W. Va. 388, 52 S. E. 465, 3 L. R. A. (N. S.) 608, 112 Am. St. Rep. 975; Morgan v. Neville, 74 Pa. 52; Wyeth Hardware Co. v. Lang, 127 Mo. 242-247, 29 S. W. 1010, 27 L. R. A. 651, 48 Am. St. Rep. 626; Harris v. Balk, 198 U. S. 215, 25 Sup. Ct. 625, 49 L. Ed. 1023.
Many of the decisions coming within the class of cases first cited are also in part based upon the theory that unless the debt was owing to the creditor in the state where the action was commenced, in which the writ of attachment or garnishment was issued and served, the court could not acquire jurisdiction to condemn the debt in the hands of the garnishee, and the garnishee would not therefore be protected by the judgment under the full faith and credit clause of the Federal
Mr. Justice Peckham, in referring to whether a debt has a situs for the purposes of attachment, and the power of the court to condemn the debts in the hands of the debtor, in Harris v. Balk, supra, says:
“If there he a law of the state providing for the attachment of the debt, then if the garnishee be found in that state, and process he personally served upon him therein, we think the court thereby acquires jurisdiction over him, and can garnish the debt due from him to the debtor of the plaintiff and condemn it, provided the garnishee himself could be sued by his creditor in that state. We do not see how the question of jurisdiction vel non can properly be made to depend upon the so-called original situs of the debt, or*72 upon the character of the stay of the garnishee, whether temporary or permanent, in the state where the attachment is issued. Power oyer the person of the garnishee confers jurisdiction on the courts of the state where the writ issues. (Blackstone v. Miller, 188 U. S. 189, 206 [23 Sup. Ct. 277, 47 L. Ed. 439.]) If, while temporarily there, his creditor might sue him there and recover the debt, then he is liable to process of garnishment, no matter where the situs of the debt was originally. We do not see the materiality of the expression ‘situs of the debt,’ when used in connection with attachment proceedings. If by situs it meant the place of the creation of the debt, that fact is immaterial. If it be meant that the obligation to pay the debt can only be enforced at the situs thus fixed, we think it plainly untrue. The obligation of the debtor to pay his debt clings to and accompanies him wherever he goes. He is as much bound to pay his debt in a foreign state when therein sued upon his obligation by his creditor, as he was in the state where the debt was contracted. We speak of ordinary debts, such as the one in this case. It would be no defense to such suit for the debtor to plead that he was only in the foreign • state casually or temporarily. His obligation to pay would be the same whether he was there in that way or with an intention to remain. It is nothing but the obligation to pay which is garnisheed or attached. This obligation can be enforced by the courts of the foreign state after personal service of process therein, just as well as by the courts of the domicile of the debtor. If the debtor leave the foreign state without appearing, a judgment by default may be entered, upon which execution may issue, or the judgment may be sued upon in any other state where the debtor might be found. In such case the situs is unimportant. It is not a question of possession in the foreign state, for possession cannot be taken of a debt or of the obligation to pay it, as tangible property might be taken possession of. Notice to the debtor (garnishee) of the commencement of the suit, and notice not to pay to his creditor, is all that can be given, whether the garnishee be a mere casual and temporary comer, or a resident of the state where the attachment is laid. His obligation to pay to his creditor is thereby arrested and a lien created upon the debt itself. (Cahoon v. Morgan, 38 Vt. 234, 236; National Fire Ins. Co. v. Chambers, 53 N. J. Eq. 468, 483 [32 Atl. 663.]) We can see no reason why the attachment could not be thus laid, provided the creditor of the garnishee could himself sue in that state and its laws permitted the attachment.”
Tbe court also adopts tbe following statement of tbe law from Parsons on Contracts, namely: “All debts are payable everywhere, unless there be some special limitation or provision in respect to tbe payment; tbe rule being that debts as such have no locus or situs, but accompany tbe creditor everywhere, and authorize a demand upon tbe debtor every
If the foregoing statement of the law is sound (and to our minds it is without a flaw), it necessarily follows that in attaching a debt by the process of garnishment nothing is sought nor accomplished except to establish a lien, and to prevent the debtor from discharging his obligation to pay the debt directly to his creditor, and to require the debtor to hold it and to pay it as directed by the court for the purpose of applying it in discharge of a debt due from the defendant to the plaintiff in the action. The only inquiries directed to the garnishee, and which he is required to answer, are whether he is indebted to the defendant, when does this obligation to pay mature, and what is the amount of the indebtedness ? No doubt, if the obligation to pay has not matured, and the debt is made payable by contract at a particular place and under special conditions, the garnishee ought to disclose that fact when he is called upon to answer. The United States Supreme Court, to our minds, makes it quite clear that a debt can only be condemned in the hands of the garnishee in a jurisdiction where the creditor of such garnishee could himself enforce payment of such debt against the garnishee. This is logical, for the reason that if nothing tangible is attached by the process of garnishment, and nothing is arrested except the obligation to pay the debt by the . garnishee, it must follow that a court may not disregard the conditions upon which the obligation to pay rests, and may not enforce it against the garnishee unless the garnishee’s creditor could enforce it at the time when, and at the place where, the action is commenced against the creditor of the garnishee.
In 6 Thompson on Corp., sec. 8073, the author, in referring to the subject now under consideration, says: “When the nature of the proceedings by garnishment is considered, the crucial test by which to determine this, question (the right
A debt, therefore, that may be enforced in any jurisdiction by a person against his debtor, may also by a creditor of such person be attached by process of garnishment
The only question that remains, therefore, is: Could the debt or obligation to pay which is involved in this case have been enforced by the defendant against the garnishee in Salt Lake County, where the writ of garnishment was. served on the garnishee in this case ? It should be remembered that under our statute (section 3095, Comp. Laws 1907) the garnishee is required to' answer in writing and under oath. By the provisions of section 3099, the plaintiff in the action may take issue on any fact stated in the garnishee’s answer; but unless he does so within ten days the answer of the garnishee will be deemed to be true. We are of the opinion that if the garnishee desires to make the defense that the debt or obligation, if any exists in favor of the defendant, is payable at any particular place, or upon special conditions by virtue of a contract entered into between the garnishee and his creditor, the garnishee should set forth the
There is no finding, nor is there any evidence, that there -existed any special contract with respect of payment, wbicb prevented tbe defendant from suing and recovering judgment for the wages due him against tbe garnisbee in tbis state. This being so, tbe test laid down by tbe Supreme Court of tbe United States applies to tbis case, namely, inasmuch as tbe defendant could bave sued tbe garnisbee in this state for tbe amount due him from it, therefore tbe plaintiff may also sue the gamisbee and recover from it tbe amount found due from it to tbe defendant. Tbe finding therefore is entirely insufficient to prevent a recovery by tbe plaintiff against tbe garnishee in case that it be found that be is entitled to judgment against tbe defendant.
In view of tbe conclusion reached by us, all of tbe other points raised by tbe appellant become immaterial, and we therefore do not deem it necessary to consider them specially.
In concluding this opinon, we feel constrained to add that it has been suggested that, even though it be conceded that tbe rule laid down by the United States Supreme Court conforms to good reason and sound logic, yet, if tbe rule be rigidly enforced, it may, under certain circumstances, result in inflicting great injustice upon a certain class of debtors. In this connection it is suggested that, in view of tbe immense interstate traffic which is carried on by our great railway systems through their vast army of employees, a few enterprising collectors, if located at favorable points within the United States, may, by the process of garnishment, attach the wages of a vast number of employees at points so far distant from their homes, and under circumstances which will prevent such employees from making any defense, although they may have a complete defense to the action. It is also contended that at all events it will, in almost every instance, prevent the heads of families wlm live in other states from successfully claiming their exemptions under local exemption laws. If it be conceded, however, that all that is claimed is true, and if it be further conceded that the law with respect to these matters can and should be changed, yet both the power and the duty to make changes in the law is with the legislature and not with the courts. It is the duty of this court to declare the law as it finds it. While under our Constitution we may call
After filing the foregoing opinion, counsel for the gar
The judgment of the district court is therefore reversed, and the cause is remanded to that court, with directions to vacate and set aside its order discharging the garnishee, and it is further directed to proceed against the garnishee as provided in sections 3096 and 3097, Comp. Laws 1907. Appellant to recover costs.